Where have the cattlemen gone?USDA report shows hundreds are leaving cattle business in South Dakota.
By: Ross Dolan, The Daily Republic
SALEM — For Gene Streff, family factors contributed to a decision to get out of the cattle business.
Streff, 52, of rural Salem, said he wasn’t certain that anybody in his family would take on the financial and time commitment required to maintain a livestock operation.
“Everybody’s life keeps changing, and it was just our choice to exit the livestock market,” said Streff, the third generation of his family to work his farm.
He plans to remain in farming, but making the shift to crops has given him and his wife more free time.
Statistics on cattle operations indicate there could many other cattle producers making similar decisions. Between 2002 and 2007, the number of cattle operations in South Dakota declined from 15,515 to 13,800.
Newer numbers are not available, because federal budget cuts ended the annual collection of the statistics by the USDA’s National Agricultural Statistics Service. Updated numbers won’t be available until next year, after this year’s Census of Agriculture is complete.
Meanwhile, numbers of cattle, which are tracked annually, are also down.
An NASS release shows the state’s inventory of cattle and calves totaled 3.65 million head in January 2012, down 1 percent from 2011 and 4 percent from 2010. South Dakota’s cattle inventory topped 4 million as recently as 2000.
The reasons producers leave the cattle business are varied. Jim Krantz, a cow/calf field specialist for South Dakota State University’s Mitchell Regional Extension Center, said some aging farmers are “choosing to drop a more labor-intensive livestock operation in favor of an expanded cropping operation.” That labor can include round-ups, vaccinating, calving, branding and other cattle-related tasks.
Making the jump to crops-only can also be a sound business decision, Krantz said, since crop farmers have a financial safety net that’s not available to livestock producers.
“That is not to say that livestock producers are not enjoying some of the most financially rewarding times in history, but it is much more labor-intensive, and finding additional livestock labor is a real challenge,” he said.
South Dakota Cattlemen’s Association Executive Director Jodie Hickman, of Pierre, said her organization is aware some producers are leaving the business.
“What we’re hearing, anecdotally, is that some folks are close to retirement and want to slow down, but we can’t quantify that number.”
Cattlemen’s Association First Vice President Cory Eich, of Canova, said finding a way for young farmers and ranchers to get into the cattle industry has been an ongoing problem.
“Grain prices are trumping cattle prices — even though cattle prices are up — but the cattle industry is more than a business. It’s a way of life,” he said. “And it’s hard to compete unless you’re devoted to it.”
For many producers, Eich said, diversification into both crops and livestock has been a way to cope with the cyclical natures of the businesses.
He said the lower cattle numbers don’t tell all, since efficiencies in feeding and genetics have allowed cattlemen to produce more pounds of beef from fewer cattle.
Silvia Christen, executive director of the Rapid City-based South Dakota Stockgrowers Association, said markets and weather can be wild cards that impact decisions to stay in or leave the livestock business.
“The drought situation is definitely becoming a little scary,” Christen said. “There are a lot of producers who are thinking of selling down some of their herds, and that’s definitely going to be hard to recover from.”
In addition to losing cattle numbers, a deep selloff will cause some producers to lose the valuable herd genetics they’ve taken years to build.
The good news, Christen said, is that cattle producers have had several years of good markets and are as prepared as they can be for the onset of drought.
“All predictions show that the market is going to hold pretty firmly for cattle and calf prices,” she said.
A long drought, however, could have a drastic impact on the bottom lines of all producers, Christen said, and could be the tipping point to drive some producers out of the business.
“With the extended drought that we had about five years ago or so, a lot of producers had pared down pretty much to the bare bones and were starting to build back up before we got this dry spell.”
The final decision to shut down will be a tough, but personal, call.
“At what point do you get out of the industry?” Christen asked. “Cattle prices are good right now, and for those producers who don’t have a successor or someone wanting to come into the operation, it might be better to get out at this point.”
‘A passion’ for some
The strong recent markets have allowed some young farmers and ranchers to come back home.
“I think those operations will stretch as far as they can to keep their family businesses going,” Christen said.
Frank Volmer, who is a partner in sale barns at Chamberlain and Winner, said rising expenses are causing some producers to consider leaving the business.
For the short-term, Volmer believes the drought will push up this year’s timetable for cattle sales, as producers pare their herds in response to short forage and rising feed costs, but industry shrinkage has been going on for years.
“As things now stand, you’ve got to get big or you’ve got to get out,” Volmer said.
Paul Halverson, of rural Howard, who was waiting his turn to drop off some cattle at the Mitchell sale barn Wednesday, said he plans to stay in the livestock business.
Halverson said crop farming occasionally looks attractive, “especially in the wintertime,” but he wouldn’t give up the cattle trade.
Scott Werning, 28, of Parkston, figures he already has 20 years of experience in the livestock trade and has no plans to leave the family business. He was in Mitchell selling off a few animals from his herd during the recent hot weather.
Werning sees nothing but upside for the cattle industry, saying “worldwide population increases, a growing demand for beef and lower herd sizes only point to a big payday down the road.”
The only people he knows who are leaving the business are leaving it because of retirement.
“I like the people, the nature of the business and the freedom of being your own boss,” he said. “For me, it’s just a passion.”